Competition in telecommunications markets is partially dependent upon fair and impartial access
by all telecommunications carriers to national numbering resources, or telephone numbers.
Inefficiencies in the allocation and utilization of numbering resources threaten the growth of
competition by preventing new entrants from getting into telecommunications markets, and by
preventing carriers already providing services from expanding their offerings. Equally
important, considerable burdens are imposed on consumers by the inefficient administration of
telephone numbering resources. Consumers face additional costs, both tangible and intangible,
when a new area code is implemented in their local area.

Area Code Facts

Total area codes within the North American Numbering Plan (NANP): 618

Area codes in service today: 317 (207 within the U.S.)

Area codes in jeopardy today: 54 (all within the U.S.)

Area codes activated in 1997: 43 (within the U.S.)

Area codes activated in the ten-year period 1984 - 1994: 9 (within the U.S.)

Since the release of the Numbering Resource Optimization NPRM just 10 months ago, 24
new area codes have been assigned in the U.S. According to the North America Numbering
Plan Administrator's (NANPA) most recent projections, 47 area codes will exhaust by the
end of the year 2000.

California, at the end of 1992, had 13 area codes in use. The California Public Utilities
Commission projects that by the end of 2002, it will have 41 area codes.

Although it is difficult to pinpoint exactly, current projections by NeuStar, administrator of
the North American Numbering Plan (NANP), or telephone numbering system, show that
area codes may completely run out within the next ten to fifteen years.

Background on Current Ten-Digit System

In 1947, AT&T adopted the current nationwide numbering scheme, under which the ten-digit
telephone number serves not only as a network "address," but also conveys information for
routing and billing phone calls. The principal benefit of this system is that it permits
automated routing of long-distance phone calls, preventing the need for operators to assist in
routing.

Under the allocation system that developed to support this system, numbering resources are
assigned to local telephone exchange carriers on the basis of physical geography, rather than
on the basis of end-user demand for those numbers. This system worked smoothly so long as
only one entity (the local exchange carrier) offered only one type of service (wireline
telephony) to customers.

Because of the relatively recent explosion of competitive market entry, customer demand for
new services, and the allocation of telephone numbers to multiple service providers, there has
been an incredible increase in demand for telephone numbers to accommodate wireless
telephone service, competitive local wireline service, and additional telephone lines to
support additional services such as Internet, data, and facsimile services.

Numbering Resource Optimization Strategies / Miscellaneous

The Commission is seeking to:

minimize the negative impact on consumers;

ensure sufficient access to numbering resources for all service providers that need them to enter into or to compete in telecommunications markets;

avoid, or at least delay, exhaust of the NANP and the need to expand the NANP;

impose the least societal cost possible, in a competitively neutral manner, while obtaining the highest benefit;

ensure that no class of carrier or consumer is unduly favored or disfavored by the Commission's optimization efforts; and,

minimize the incentives for carriers to build and carry excessively large inventories of numbers.

There are several factors that contribute to the current strain on numbering resources. These
factors include:

the allocation of numbers in blocks of 10,000 (NXX codes);

the request by carriers to have at least one NXX code per rate center, or geographic area;

the increased demand for numbering resources by new entrants and new technologies; and,

the absence of regulatory, industry or economic control over requests for numbering resources.

Last year, the FCC granted the following states interim authority to engage in various
telephone number conservation procedures: